Section 17-1724.2-4 - MAGI-based income determination(a) MAGI-based income shall be calculated using the same methodology used to determine the modified adjusted gross income as defined in 26 C.F.R. §1.36 B- 1(e)(2). The Internal Revenue Service (IRS) Form 1040 is used as a guide to identify taxable income. (1) Income included in the MAGI-based determination includes the following: (A) Wages, salaries, tips, etc.;(F) Taxable refunds, credits, or offsets of state and local income taxes;(H) Business income or (loss);(I) Capital gain or (loss);(J) Other gains or (losses);(K) Taxable amount of IRA distributions;(L) Taxable amount of pensions and annuities; (M) Rental real estate, royalties,partnerships, S corporations, trusts,etc. ; (N) Farm income or (loss); (O) Unemployment compensation; (P) Taxable amount of social securitybenefits; and (2) Income excluded from the MAGI-based determination includes the following: (B) Worker's compensation;(C) Veteran's benefits; and(D) Depreciation of business expenses.(3) Deductions allowed for the MAGI-based determination include the following: (B) Certain business expenses of reservists, performing artists, and fee-basis government officials;(C) Health savings account deduction;(E) Deductible part of self-employment tax;(F) Self-employed SEP (simplified employee pension), SIMPLE (savings incentive match plan for employees), and qualified plans;(G) Self-employed health insurance deduction; (H) Penalty on early withdrawal of savings; (J) IRA (individual retirement account)deduction; (K) Student loan interest deduction; (L) Tuition and fees; and (M) Domestic production activities deduction, (b) The following are exceptions to the determination of MAGI-based income: (1) Lump sum amounts shall be counted only in the month received;(2) Scholarships, awards, or fellowship grants used for educational purposes (not for living expenses) shall be excluded;(3) Certain American Indian/Alaska Native income as defined in 42 C.F.R. § 435.603 shall be excluded: (A) Distributions from Alaska Native Corporations and Settlement Trusts;(B) Distributions from any property held in trust that are subject to Federal restrictions and located within the most recent boundaries of a prior Federal reservation or otherwise under the supervision of the Secretary of the Interior;(C) Distributions and payments from rents, leases, rights of way, royalties, usage rights, or natural resource extraction and harvest from:(i) Rights of ownership or possession in any lands described in subparagraph (B); or(ii) Federally protected rights regarding off-reservation hunting, fishing, gathering, or usage of natural resources ,-(D) Distributions resulting from real property ownership interests related to natural resources and improvements: (i) Located on or near a reservation or within the most recent boundaries of a prior Federal reservation;(ii) Resulting from the exercise of federally-protected rights relating to such real property ownership interests;(E) Payments resulting from ownership interests in or usage rights to items that have unique religious, spiritual, traditional, or cultural significance or rights that support subsistence or a traditional lifestyle according to applicable Tribal Law or custom; and(F) Student financial assistance provided under the Bureau of Indian Affairs education program.(c) After applying subsections (a) and (b), as applicable, add the following to arrive at the MAGI-based income: (1) Foreign income excluded from gross income under §911 of the Code;(2) Tax-exempt interest; and(3) Tax-exempt social security income.(d) The household income is the sum of the MAGI-based income, as determined under this section, of all individuals included in the applicant's or beneficiary's household, except for the income of:(1) An individual included in his or her natural or biological, adopted, or step parent's household who is not expected to be required to file a tax return for income not exceeding the taxable year's filing threshold, regardless of whether or not the individual files a tax return;(2) A tax dependent other than a spouse or natural or biological, adopted, or step child who is not expected to be required to file a tax return for income not exceeding the taxable year's filing threshold, regardless of whether or not the tax dependent files a tax return. When § 17-1724.2-13(b)(2) is applied, such tax dependent shall be considered for eligibility as a separate household. The income of such tax dependent, who is described in § 17-1724.2-13(b)(2), is counted in its entirety when determining the tax dependent's own eligibility. Haw. Code R. § 17-1724.2-4
[Eff 09/30/13] (Auth: HRS § 346-14; 26 C.F.R §1.36B; 42 C.F.R. §§435.4, 435.115, 435.601, 435.602, 435.603 ) (Imp: HRS § 346-14; 26 C.F.R §1.36B; 42 C.F.R. §§435.4, 435.115, 435.601, 435.602, 435.603 )